Can You Really Budget For The Big Christmas Spend?

It’s the most wonderful time of the year and you have let it sneak up on you once again. If you are like many Americans, you certainly plan to purchase some Christmas gifts for the family but may not have socked away money towards the effort.

I get it, life comes at you fast and so many unexpected things can pop up. This holiday season I have clients dealing with things as minor as simple car repairs to things as major as divorce. But even inside tough situations, with the right planning you can keep your head above water.

In our Smarter Money Solutions programs, we teach participants how to anticipate every possibility throughout the year, including all the holiday gift giving. The key is to set your emergency funds aside and truly use them for emergencies. For those unanticipated expenses like the washing machine breaking down or a home insurance co-pay because a tree fell on the roof. For those one-off expenses throughout the year that you know are eventually coming, set up a separate fund for them. Common categories are vacation, gifts, licensing and auto maintenance or gifts.

Once you have these categories, instead of putting your money blindly into your emergency fund, you now have a fund earmarked specifically for gifts. So, when your child’s classmate’s birthday party pops up, you pull the $20 for a gift from the gift fund. When Christmas rolls around, you have saved all year towards the amount that you want to spend on the family and pull the funds from that account. This way, you neither come up short on those everyday household bills nor do you have to resort to credit cards to get you through ‘til tax refund time when you can pay off the Christmas debt.

Even if you haven’t set a plan ahead of time for this year, it’s never too late! Get a jump on next year’s spending and start setting the funds aside now! For this year, please go forward and enjoy the holidays. But if you need a little help getting on track for Christmas 2019, visit us at SmarterMoneySolutionsAZ.com. Together, we’ll set a plan for your money instead of playing catch up. We start the Empowerment Zone group meetings in January.